Abstract:
Cost overrun in any sector brings bad image to the organization and unrest to the professionals. The cost overrun can be resulted either due to risk events or non risk events. Possible non risk events in bridge projects are the scope changes, design changes, quantity increase and variations. However those non risk events produce a justification to the additional cost incurred and it enhance the value of the project adding more properties. On the other hand risk events take place unexpectedly and it wastes the project money and degrades the value of the project. Therefore in order to absorb this risk cost, without making any burden to the project, conventionally it is practicing to allocate contingency budget. However still the most road and bridge contracts do not meet set cost targets as a result of improper assessment of risk factors inherent in construction. The majority of time and cost overruns are attributable to either unforeseen or foreseen events for which uncertainties were not properly accommodated. The Sri Lankan practice is to add a 10% contingency sum in bill quantities to cover the risks or uncertainties. However, even with the presence of this contingency allocation, cost overruns still prevail in the industry. Identification of the root causes for the contingency budget overrun and presenting preventive strategies for the small bridge contracts cover the research topic.
